TIDEWATER RENEWABLES LTD. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 RESULTS, AND REFINANCING OF CREDIT FACILITIES
CALGARY, AB, March 27, 2025 /CNW/ - Tidewater Renewables Ltd. ("Tidewater Renewables" or the "Corporation") (TSX:LCFS) is pleased to announce financial and operating results for the fourth quarter and year ended December 31, 2024.
The related audited consolidated financial statements, as well as Management's Discussion and Analysis ("MD&A") for the fourth quarter and year ended December 31, 2024 and Annual Information Form as of December 31, 2024, are available on SEDAR+ at www.sedarplus.ca and on Tidewater Renewables website at www.tidewater-renewables.com.
Q4 2024 Results
During the fourth quarter of 2024, the Corporation reported a net loss attributable to shareholders of $3.4 million, compared to a net loss attributable to shareholders of $12.7 million during the fourth quarter of 2023. The decrease in the net loss attributable to shareholders in the fourth quarter of 2024 was primarily due to an unrealized gain on derivative contracts and income from the Corporation's joint venture investment in the Rimrock Cattle Company. This was partially offset by lower deferred tax recoveries and higher financing costs.
Tidewater Renewables generated Adjusted EBITDA(1)[1]of $6.0 million during the fourth quarter of 2024, a decrease of 44% from the fourth quarter of 2023 and a decrease of 56% from the third quarter of 2024. The decrease was attributed to the sale of certain co-processing assets and the termination of take-or-pay contracts in connection with the related party transaction (the "Tidewater Midstream Transaction") with Tidewater Midstream and Infrastructure Ltd. ("Tidewater Midstream"), partially offset by the sale of BC LCFS Credits (as defined herein) in the fourth quarter pursuant to forward sales contracts that were entered into and priced during the first half of 2024 prior to the significant decline in the market price for BC LCFS Credits.
The Corporation's renewable diesel & renewable hydrogen complex (the "HDRD Complex") achieved average daily throughput of 2,677 bbl/d during the fourth quarter of 2024, representing an 89% utilization rate. This compared to average daily throughput of 1,700 bbl/d(2) during the fourth quarter of 2023, representing a 57% utilization rate.
On November 25, 2024, Thomas P. Dea was appointed as a director of the Corporation. With his distinguished career in private equity, the Corporation looks forward to leveraging Mr. Dea's expertise to enhance the strategic direction and support the continued growth of Tidewater Renewables. On the same date, Margaret (Greta) Raymond retired from the board of directors (the "Board"). The Corporation extends its sincere appreciation to Ms. Raymond for her valuable contributions and wishes her continued success in her future endeavors.
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(1)
Non-GAAP financial measure. See the "Non-GAAP and Other Financial Measures" in this press release and the Corporation's MD&A for information on each non-GAAP financial measure or ratio.
(2)
Represents the throughput from November 7, 2024 to December 31, 2024, during which the HDRD Complex was fully operational and no longer in the commissioning phase.
Year End 2024 Results
During the year ended December 31, 2024, the Corporation reported a net loss attributable to shareholders of $357.8 million, compared to a net loss attributable to shareholders of $41.0 million for the year ended December 31, 2023. The increase in the net loss attributable to shareholders was primarily driven by losses on the sale of assets in the Tidewater Midstream Transaction, realized losses on derivative contracts, and higher financing costs. These factors were partially offset by an unrealized gain on derivative contracts, deferred tax recoveries, and higher operating income compared to the prior year.
In 2024, Tidewater Renewables generated Adjusted EBITDA(1)of $74.5 million, an increase of 62% from 2023 Adjusted EBITDA of $45.9 million. The increase was due to the full year of operations at the HDRD Complex and the sale of an increased number of BC LCFS Credits, partially offset by the sale of certain co-processing assets and the termination of take-or-pay contracts in connection with Tidewater Midstream Transaction, and realized losses on derivative contracts.
Significant improvements in throughput and reliability at the HDRD Complex resulted in achieving an average daily throughput of 2,643 bbl/d for the full year of 2024, representing an 88% utilization rate. Over 170 million liters of renewable diesel have been produced and sold into the local British Columbia market since the HDRD Complex commenced commercial operations in November 2023.
Tidewater Renewables continued to make meaningful progress on the front-end engineering design work for its proposed 6,500 bbl/d sustainable aviation fuel ("SAF"). The project remains contingent upon a final investment decision which is anticipated in the second half of 2025.
In 2024, the Corporation made significant strides in enhancing its leverage profile and reducing cash interest expenses through a series of strategic asset dispositions. These included the Tidewater Midstream Transaction and the divestiture of its used cooking oil feedstock business, generating total proceeds of $140.3 million which were used to pay down existing indebtedness.
In 2024, the Corporation completed the refinancing of its senior credit facility (the "Senior Credit Facility") and second lien credit facilities. The aggregate principal amount of the Senior Credit Facility was reduced from $175.0 million to $30.0 million, and the maturity date was extended to February 28, 2026. Additionally, the maturity of the $25.0 million tranche B second lien credit facility was also extended to February 28, 2026.
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(1)
Non-GAAP financial measure. See the "Non-GAAP and Other Financial Measures" in this press release and the Corporation's MD&A for information on each non-GAAP financial measure or ratio.
Subsequent events
On January 10, 2025, Tidewater Renewables completed the sale of its interest in the Rimrock Renewables Partnership ("RNG LP") to Biocirc Canada Holdings Inc., an affiliate of Biocirc Group ApS for total proceeds of $7.8 million, of which $4.7 million was received on close and a further $3.1 million could be received upon the satisfaction of certain post-closing conditions on or before December 30, 2025. The net proceeds of this transaction were used to repay outstanding indebtedness.
On February 27, 2025, the Government of British Columbia announced changes to the Low Carbon Fuels Act (the "Amendments") to increase to the renewable fuel requirement for diesel from 4% to 8% for the 2025 compliance period, together with, effective April 1, 2025, requiring such renewable fuel content to be produced in Canada. Management believes that the Amendments represent a good first step in levelling the unfair trade environment and supporting the economic viability of Tidewater Renewables and the broader Canadian biofuels industry.
On March 6, 2025, the Canada Border Services Agency ("CBSA") formally initiated a countervailing (anti-subsidy) and anti-dumping duty investigation into imports of renewable diesel from the United States (the "Investigation"). The Investigation follows a complaint filed by Tidewater Renewables with the CBSA at the end of 2024 (the "Complaint"). In initiating the Investigation, the CBSA confirms that Tidewater Renewables provided satisfactory evidence to support its allegations that U.S. renewable diesel imports were subsidized and dumped, causing harm to Tidewater Renewables. The Complaint targets unfairly traded imports of renewable diesel from the United States that significantly undermine the Canadian renewable fuels industry. Management anticipates that provisional duties will be imposed at the Canada-U.S. border by June 2025. Final duties, which would be in place for five years and can be renewed every five years thereafter, could be imposed by September 2025 following a ruling by the Canadian International Trade Tribunal. If final duties are imposed at the levels expected by management, valued between $0.50 and $0.80 per litre of renewable diesel imported from the United States, management believes these duties would support long-term market stability for Tidewater Renewables' renewable diesel production and its related emission credits.
On March 26, 2025, the Corporation successfully amended its Senior Credit Facility and second lien credit facility (the "Refinancing"). The Refinancing provides over $15.0 million of additional capacity to the Corporation's credit facilities and extends the maturity date of the second lien tranche B and tranche C facilities from February 28, 2026, to October 24, 2027. The Refinancing also waives the requirements to comply with the quarterly financial covenants until March 31, 2026, previously waived until September 30, 2025, at which time the Corporation will be required to maintain certain financial covenants on an annualized basis.
Selected financial and operating information are outlined below and should be read in conjunction with the Corporation's audited financial consolidated financial statements and related MD&A for the fourth quarter and year ended December 31, 2024, which are available under the Corporation's profile on SEDAR+ at www.sedarplus.ca and on its website at www.tidewater-renewables.com.
Financial Highlights
Three months ended December 31,
Year ended December 31,
(in thousands of Canadian dollars except per share information)
2024
2023
2024
2023
Revenue
$
76,442
$
40,376
$
426,544
$
97,679
Net loss attributable to shareholders
$
(3,385)
$
(12,747)
$
(357,846)
$
(41,019)
Net loss attributable to shareholders
per share, basic and diluted
$
(0.09)
$
(0.37)
$
(10.15)
$
(1.18)
Adjusted EBITDA (1)
$
6,005
$
10,708
$
74,475
$
45,941
Net cash (used in) provided by operating
activities
$
(21,438)
$
17,161
$
54,648
$
22,784
Distributable cash flow (1)
$
(7,855)
$
2,142
$
29,740
$
2,747
Distributable cash flow per share, basic (1)
$
(0.22)
$
0.06
$
0.84
$
0.08
Distributable cash flow per share, diluted (1)
$
(0.22)
$
0.06
$
0.82
$
0.08
Total common shares outstanding (000s)
36,372
34,763
36,372
34,763
Total assets
$
406,526
$
1,086,698
$
406,526
$
1,086,698
